SBA re-opens PPP to community financial institutions first
The U.S. Small Business Administration, in consultation with the U.S. Treasury Department, re-opened the Paycheck Protection Program (PPP) loan portal on Monday, January 11, 2021 at 9 am ET. SBA is continuing its dedicated commitment to underserved small businesses and to addressing potential access to capital barriers by initially granting PPP access exclusively to community financial institutions (CFIs) that typically serve these concerns.
When the PPP loan portal re-opened, it initially accepted First Draw PPP loan applications from participating CFIs, which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs) and Microloan Intermediaries. These lenders made up approximately 10% of all PPP participating lenders in 2020. A First Draw PPP loan is for those borrowers who have yet to receive a PPP loan before the program closed in August 2020.
On Jan. 13, 2021, participating CFIs may begin submitting application information to SBA for Second Draw PPP loans. A Second Draw PPP loan is for certain eligible borrowers that previously received a PPP loan, generally have 300 employees or less, and has suffered a 25% reduction in gross receipts. At least $15 billion is set aside for additional PPP lending by CFIs.
A few days later, additional lenders will be able to submit First and Second draw PPP loan applications. SBA will continue to provide updates on systems operations during the week of Jan. 11, 2021. Additionally, SBA plans to dedicate specific times to process and assist the smallest PPP lenders with loan applications from eligible small businesses.
The opening of the SBA loan system is designed to efficiently and effectively implement the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and to ensure increased access to the PPP for minority-, underserved-, veteran- and women-owned small business concerns. SBA also is calling upon its lending partners to redouble their efforts to assist eligible borrowers in underserved and disadvantaged communities.
"This new rollout of the Paycheck Protection Program will prioritize underserved, minority, veteran, rural, and women-owned businesses that were unable to take advantage of the first round of PPP funding," said SBA Arkansas District Director Edward Haddock. "SBA's partnership with Community Financial Institutions will ensure that every small business in our state will have access to the resources they need to keep their employees on payroll and overcome the challenges caused by the pandemic."
As SBA works to continue building and supporting this approved relief legislation, please sign up for our emails for the most up-to-date information on PPP and other COVID-19 funding options at sba.gov/updates.
Updated PPP Lender forms, guidance, and resources are available at www.sba.gov/ppp.